Social Policy in Ontario

Different take on inequality

Posted on January 19, 2011 in Equality Debates

Source: Toronto Star — Authors: Mark Milke

TheStar.com – opinions/letters – Re: Canada discovers trickle-up economics, Column Dec. 28
Published On Sun Jan 16 2011.    Mark Milke

Linda McQuaig seems peremptorily annoyed that anyone might question her take on inequality as being injurious to the creation of prosperity. In particular, she argues I “denounced” her by making just that point in a recent column.

If McQuaig wants to take differences personally, that’s her choice but unfortunate. I thought I was quite generous in crediting her as one who wants less poverty, as do I — though we obviously disagree on the proper means to such an end.

But she also asserted that inequality is rising. McQuaig and others toss around many U.S. statistics. Let’s turn to relevant Canadian ones from economist Chris Sarlo at the University of Nipissing who precisely defines poverty and inequality.

In 2009, Sarlo looked at two of the best measurements: adult equivalent incomes and average equivalent consumption. (The former takes into account households of different sizes; the latter reveals how people may have government income or under-reported income.) Sarlo found inequality has barely budged in 35 years.

In addition, Canada has one of the highest levels of intergenerational mobility in the developed world. It is consistent with Scandinavian nations and trumps even Sweden. And Statistics Canada studies show that most of us who started with low incomes don’t stay poor.

Even if inequality were on the rise, the notion that inequality is a cause of multiple social problems — another assertion by the columnist — is a classic correlation-causation mistake. According to that logic, even if prices stayed the same and the richest Canadians saw their income and wealth triple while the rest of us saw our incomes and wealth only double, social problems and pathologies would increase. It’s a ludicrous leap.

It simplifies complex reasons for poverty, child poverty, crime, and sickness, all important matters that ought to be carefully addressed.

Mark Milke, Director of the Fraser Institute’s Alberta office, Calgary

Tags: ideology, poverty, standard of living, tax

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